Passenger Trains > Railway Age Article: "Private Sector Investment in NEC Ops?"

Provocative 9/10/20 Railway Age article "Private Sector Investment in NEC Operations?"

Excerpts:
"...So it may now be time to consider private-sector proposals for funding operations and infrastructure on the NEC and its branches. In this article, we will explore such a proposal for operations. It is offered by AmeriStarRail. and according to Scott R. Spencer, the company’s co-founder and Chief Operating Officer, it is “infrastructure agnostic” in that its operating model could be applied if Amtrak continues to own the NEC infrastructure, or if another entity takes it over...."

and 

"...One of the core features of the plan is to eliminate terminal operations for NEC trains at Washington D.C., Philadelphia, and New York. The key would be through-running. There is nothing new about recommending such an operation in New York City; it has been proposed by the Institute for Rational Urban Mobility (IRUM), ReThinkNYC and a number of other local advocates individually. The AmeriStarRail plan takes the concept further, and introduces through-running further south. Spencer points to potential efficiency improvements in equipment and crew utilization, new marketing opportunities, and freeing tracks at major stations for local rail services as potential benefits of through-running, as well as getting NEC trains out of Ivy City Yard in Washington and Sunnyside Yard in New York. He said the plan would result in “unlocking the NEC” and would offer “triple-class service” on every train, as opposed to Amtrak’s current Acela trains, which offer only the two premium-fare classes..."


Link to free article: https://www.railwayage.com/passenger/intercity/private-sector-investment-in-nec-operations/?utm_source=&utm_medium=email&utm_campaign=19471

Link to interesting route maps and station track plans: https://www.railwayage.com/wp-content/uploads/2020/09/ASRCompiledMaps2020-07-14.pdf
 



Edited 2 time(s). Last edit at 09/14/20 06:44 by JPB.

Travel volume north of New York City is usually less than travel volume south of New York City, so there would be a lot of empty cars moving about.

would a private investor WANT to retain employee union workers and their wages?

just curious............

66



Edited 1 time(s). Last edit at 09/14/20 06:58 by goneon66.

There aren't many Regional trains originating/terminating at NYC except late at night or early in the morning where it makes no sense to run to New England. There are also MN slot issues the rest of the day, and limited bridge openings allowed in Connecticut.  

There is no advantage to getting trains out of Sunnyside. The concept has worked well for over a 110 years, and its trains bypass Harold Interlocking, which is already the most congested in the continent wit the LIRR.

IOW, MN and LIRR would have an easier time of it if Amtrak service vanished. 

Virginia does not need the service volume that there is north of DC. Trains would still have to stop at Union Station for 15 minutes for ingress/egress. Normal dwell time is 25 minutes, so I don't see the point of abolishing loco changes requiring hauling fuel tanks and prime movers up to Boston.

This is mostly about planners drawing train maps and playing train behind their PC's, not focusing on market needs or understanding train operations. 
 



Edited 3 time(s). Last edit at 09/14/20 07:23 by joemvcnj.

Not sure how this would actually work. The private sector makes an investment and then wants a return on their investment. But this means, they have to upkeep the NEC infrastructure, and then also charge enough in user fees to get the "return on investment." I don't see private sector investors flocking to this when the NEC is still (when compared to Europe and China and Japan high speed service corridor infrastructure), woefully behind on deferred maintenance and operating on very ancient infrastructure. It's not like it's a modern state of the art system ready to seek outside investment money on to further upkeep. It needs MAJOR overhauling, and then a thought process on how to even make money. Look at the story of Conrail. Took a LOT of government investment to try and get it updated so it could be spun off from the government. NEC is not even close to anything like that. 

A month or so ago, I said that maybe it was now time to divorce the infrastructure that Amtrak owns from the train operation Amtrak runs. Maybe this wasn't such a far-fetched idea back in 2000 and would put some transparency in place about how much each really are costing. But the funding would still have to come from the government (federal or state) till one or the other was up to say a standard that could be spun off to the private sector - if that was even to be in the cards! It's still a national necessity for train travel to operate in all likelihood so not sure if it could be spun off even like a Conrail deal.  

Private investors are going to want their ROI, which again, means user fees being charged, but that's going to fall directly to the riders and certainly jack up the prices. So I don't know how any private sector deal becomes attractive. And the first major storm that takes out a tunnel or bridge on the NEC - who comes to the aid then? Are private investors going to be able to make a HUGE billion dollars investment when catastrophe strikes? Lets remember how passenger rail service was born and transferred to the government - let alone the NEC. Penn Central couldn't handle its funding and no way was Conrail taking it on, not even commuter passenger service. It wanted OUT of that business too!  

This does seem like more "air-head" thinking - that is, the desire to run trains like planes. It is correct that they seem to know very little about rail service and how it differs. Also another example of those who know nothing about history and what can be learned from it. The appearance is they don't want to know or don't think it's even relevant to today's world.

As for the NEC right-of-way, my perpetual question is why RailNet-21 (formerly known as AirNet-21, website still at https://www.airnet-21.com/ ) seems to be constantly ignored though it would appear there is certainly some intelligence behind it.

I can remember when toll roads were first proposed here in Georgia. The state quietly signed a deal with a contract operator that would guarantee the contractors ROI. When it became public, the voters objected and the state eventually built, financed and operates the toll road system on their own.

I suspect a similar guaranteed ROI would need to be buried in any deal to get private investment into the NEC. And if taxpayers are on the hook regardless, where is the advantage?

Edit: I’ve now read the full article in Railway Age and will append my earlier comment to note that eliminating terminal operations at Sunnyside, Philadelphia and Ivy City would likely open those areas up for commercial development. Since that seems to be a core feature of Brightline’s business model in Florida, perhaps AmeriStarRail is thinking along the same lines.

Posted from iPhone



Edited 1 time(s). Last edit at 09/14/20 11:57 by Juniata.

The taxpayers pay the upkeep of the infrastructure, investors get returns on a new train company?

What happens to the Northeast if this company goes the way of Eastern airlines, Enron, or Sears?  Start a new company?

Juniata Wrote:
-------------------------------------------------------
(SNIP)
>
> Edit: I’ve now read the full article in Railway
> Age and will append my earlier comment to note
> that eliminating terminal operations at Sunnyside,
> Philadelphia and Ivy City would likely open those
> areas up for commercial development. Since that
> seems to be a core feature of Brightline’s
> business model in Florida, perhaps AmeriStarRail
> is thinking along the same lines.
>
> Posted from iPhone

Development over parts of Sunnyside Yard in Queens NY remains a hot political topic. Developers aligned wth Governor Andrew Cuomo have sparred with developers aligned with Mayor Bill de Blasio over how the site might be developed. Amtrak has said the site won't be developed, but they said that about Moynihan Station, too.

There was a TrainOrders thread on developing SSY a while back.

Molino Wrote:
-------------------------------------------------------
> The taxpayers pay the upkeep of the
> infrastructure, investors get returns on a new
> train company?
>
> What happens to the Northeast if this company goes
> the way of Eastern airlines, Enron, or Sears? 
> Start a new company?

Many TrainOrders readers have suggested the NEC and the Northeast can go to Hell. So, they can take the railroad...

(Partly kidding...)

So do we need to go back and look at lessons learned from the Penn Central? Encourage any investor to go read the book - "Wreck of the Penn Central." Even if they just read the last few chapters..........Real Estate development to finance rail improvements. And the house of cards collapsed............

https://www.discoverbooks.com/The-Wreck-of-the-Penn-Central-Joseph-R-Daughen-p/0316095206.htm?cond=0004&gclid=EAIaIQobChMIr-m9s87p6wIViZOzCh1_1wy4EAQYBiABEgJ8OfD_BwE



Edited 1 time(s). Last edit at 09/14/20 14:44 by jp1822.

I can already see those private firms don't know how much it costs to keep the NEC in great shape either!

Have private equity funds pay for and build the needed new Hudson River Tunnel between NYC and NJ.
Give them a guaranteed ROI for 30-40 years after which the ownership of the new Tunnel would revert to Amtrak or the states of NY/NJ.
It is the toll road concept.

Lackawanna484 Wrote:
-------------------------------------------------------
> Molino Wrote:
> --------------------------------------------------
> -----
> > The taxpayers pay the upkeep of the
> > infrastructure, investors get returns on a new
> > train company?
> >
> > What happens to the Northeast if this company
> goes
> > the way of Eastern airlines, Enron, or Sears? 
> > Start a new company?
>
> Many TrainOrders readers have suggested the NEC
> and the Northeast can go to Hell. So, they can
> take the railroad...
>
> (Partly kidding...)


We don't think it should go to hell, just think it should be equal with the rest of the country.

Posted from Android

goneon66 Wrote:
-------------------------------------------------------
> would a private investor WANT to retain employee union workers and their wages?
>
> just curious............
>
> 66

Yes.  Why should a private investor want to pay more than $ 2.13 an hour since those jobs can be structured as a "tipped" job.  That's a lot of money for a kindergartner.

Then again . . .

Molino Wrote:
-------------------------------------------------------
> The taxpayers pay the upkeep of the
> infrastructure, investors get returns on a new
> train company?
>
> What happens to the Northeast if this company goes
> the way of Eastern airlines, Enron, or Sears? 
> Start a new company?

Tax payers are already on the hook for up keep. At least if Amtrak was divorced of the NEC they maybe they would concentrate on all sectors of their business nation wide and not just the NEC.

Posted from iPhone

howeld Wrote:
-------------------------------------------------------
> Molino Wrote:
> --------------------------------------------------
> -----
> > The taxpayers pay the upkeep of the
> > infrastructure, investors get returns on a new
> > train company?
> >
> > What happens to the Northeast if this company
> goes
> > the way of Eastern airlines, Enron, or Sears? 
> > Start a new company?
>
> Tax payers are already on the hook for up keep.
> At least if Amtrak was divorced of the NEC they
> maybe they would concentrate on all sectors of
> their business nation wide and not just the NEC.
>
> Posted from iPhone

Hence don't offer the NEC to the private sector for "investment" and then the required ROI - keep it government owned and just do the divorce. NEC is in NO shape to be offered to any private sector. The investment and upkeep would push the user fees off the charts! Show me the user fee analysis and how much a private sector is going to dump into the NEC each year (translating to upkeep, replacement, and modernizing the corridor too). 

has ANY private investor EVER shown interest in an nec investment in the last 3 decades?

66

goneon66 Wrote:
-------------------------------------------------------
> has ANY private investor EVER shown interest in an nec investment in the last 3 decades?


I believe the investment in real estate development over and near the rail yards at Philadelphia's 30th Street Station is a resounding yes.  Come to think of it, Washington DC Union Station as well.

IIRC there are very very few privately funded toll roads. The Washington Dulles Airport connector is the only sizable one that I can think of and it's just a bit short of 30 miles long -- compared to how many millions of miles of roadway?

Face it -- since roadways developed on the socialized model, private transportation funding is at an extreme disadvantage.-- look at how much railroads have withered over the years since socialized highways came to the fore

Brian

howeld Wrote:
-------------------------------------------------------
>
> Tax payers are already on the hook for up keep.
> At least if Amtrak was divorced of the NEC they
> maybe they would concentrate on all sectors of
> their business nation wide and not just the NEC.
>
> Posted from iPhone
I believe that is so true and it would be very beneficial. The tired-out message of LD trains "robbing" corridor services would be gone;  the real cost of the NEC maintenance much clearer and so would be the real costs of running each train. If PA makes good on getting out maybe that will start things in motion? I noticed in last week's hearing that Amtrak certainly did not think THAT was a good idea..